CPUC considers $3.3 million subsidy for two FTTH projects

by Steve Blum • , , , ,

Poor broadband service in Helendale now, but fiber could be on the way.

Two fiber-to-the-home projects in the California desert, northeast of Los Angeles, will be getting a total of $3.3 million in subsidies from the California Advanced Service Fund (CASF), if the California Public Utilities Commission approves draft resolutions released last week.

The proposals, for Helendale and Wrightwood, were submitted last December by Ultimate Internet Access (UIA), an independent Internet service provider that’s already active in the area. As I noted back then, the Helendale project is particularly interesting. The plan there is to take a defunct cable system – built by Falcon and ultimately abandoned by Charter – and retrofit it with fiber. The cost for the project is pretty low – about $1,000 per household, $600 of which would be coming out of CASF. It’s estimated there are just under 2,300 homes in the area, so the CASF tab would be $1.4 million.

The Wrightwood project would run on existing poles and would cost more – $1,700 for each of the 1,900 homes reached, with CASF paying $1,000 of that. Total ask for CASF is $1.9 million.

Standard residential service would be 1 Gbps up and down for $70 a month. To make the business case work, UIA has to hit a take rate of 75% or so. That’s troubling for two reasons: it’s extremely high, even given the relative affluence of the residents and the lack of alternative, and UIA intends to use licensed microwave for backhaul. Providing an uncapped gig to something like 1,400 to 1,800 subscribers in each town, without a fiber middle mile to rely on, will be fraught.

The draft resolutions are notable for another reason. CPUC staff reviewed and approved the applications in less than four months. That’s lightning speed compared to the last CASF round, when it took a minimum of seven months and a maximum of, well, 26 months and counting, to make a go/no go decision. It bodes well for the coming year. Eleven more projects from the current round of applications are under review, as well as two from the 2013 round, with many more expected.

Wrightwood draft resolution

Helendale draft resolution